When ratifying the 2016 budget, the Parliament of Aruba passed a motion to investigate the “alternative accommodations.” The term refers to the airport ID card which asked guests where they are staying, hotel, timeshare, all inclusive or alternative accommodations, in other words apartments and private homes. Just to give you an idea how much this segment of the market has grown, I can tell you that in November 2015, 41.6% of Aruba’s visitors stayed at alternative accommodations, just 38.6% of visitors stayed in hotels, and 19.9% stayed in timeshares. Surprised at the extent of that phenomenon?

This migration from traditional accommodations to untraditional accommodations has been going on for a while, but in 2015, it really experienced growth from a reasonably high percentage, 27.8%, to the alarming current 41.6%.  So why is it alarming? Because it is a sensible, price-conscious, budget tourist that is coming, and not the big spender, that we were told we would be welcoming.

1. I am not at all surprise. Aruba has always been the perfect destination for the middle class vacationer who worked hard all year and afforded himself a great vacation in the sun, just once a year. The island was well suited for that Barefooot Elegant traveler, who did not want to pay too much, and expected value for his money, perfect weather, friendly people and an uncomplicated experience: We speak English, we accept dollars, our water is safe.
2. With the arrival of the big hotel brands, we set our sights higher, on a bigger spender, and a more affluent, sophisticated and demanding traveler. BUT, while the hotels did their share in providing deluxe accommodations, think Bucuti Beach Resort and Tara Suites, the island did not up the ante. We remained mediocre as far as value for money, cleanliness – think dump, service and most deplorably saturated, in second class restaurants, in third class retail – remember the kiosks – and in no class nightlife, think about the Olde Molen.
3. The big spenders came once, and did not return. The Ritz Carlton, did deliver, in the group business, not in the individual traveler category.
4. As the hotels made it more expensive for die-hard Aruba’s visitors, as far as room rates were concerned – who wants to pay $900 a night for beautiful four walls? – AirBnB, introduced the concept of Shared Economy, and many other websites followed, from TripAdvisor to Wimdu, HomeAway to FlipKey. Shared Economy meant we could all host and entertain, in a spare bedroom, in the apartment at the back of the house, in a converted garage.
5. This thing spread like wild fire. I understand that Aruba today has over 3,000 properties renting to guests and most of them doing a good job at an average of $150-$199 dollars a night.
6. Our loyal middle class visitor who worked hard all year and afforded himself a great vacation in the sun, just once a year, found a way to come back, without paying too much, while receiving value, in perfect weather, with friendly people for an uncomplicated experience.

So what does it mean you’re asking, who cares where they are staying, as long as they are coming to visit us. For once, the government cares, because it is supposed to receive 9.5% on the room rate and $3 environmental fee per room night, and the collection system is hardly in place, and totally depends on the goodwill of the island’s “alternative accommodations” operators, to pay up.

Over the past few years, a sub-segment of that market was born, visitors staying in “Buchi’s Garage,” strapped for cash Venezuelans, coming to Aruba to milk dollars from the ATM machines. Their number increased exponentially in the past two years, and the crazy “warm bed” system was introduced by pirate hosts, driving pirate taxis, cramming a great number of people into small spaces, at a super low rate per night.

The MinTour published a press release today promising to regulate and support that “Alternative Accommodations” segment of the market, he will be taking advise from the Dutch, to see how Amsterdam coped with the Airbnb, and the  FlipKey situation. Someone is going to be paid a lot of money for a report.

So why is the issue investigated now? Because January was a disappointing month, mostly due to mild weather in the US but also because, the affluent travelers went skiing, and the dollar-conscious visitor coming to Aruba preferred to stay at more reasonable alternative accommodations.

I will give you an example. Some of my friends, a family of 13, two couples, and their grown children and their partners, rented a house on Malmok.  They had a perfect time together. They reported the house was nicely equipped. The slugs among them sat on the deck the whole day, and the active ones jogged along the coastline, and went snorkeling. Every single family member, on a different type of diet, maintained different grazing habits, which was easy with a comfortable kitchen. I don’t see this working for them as well in a traditional hotel environment.

The people we see booking alternative accommodations want to pay less, and vacation more, they want to eat less, and read more. The first timers want to book 4 or 5 days, because that’s all their budget can afford, and the older ones want to book 10 days, at a lower rate, because one week is never enough.

They are wonderful visitors, but they prefer a tea kettle instead of room service, and an ice cooler instead of a pool bar!

Think about it, if the government manages to collect the taxes, then it’s a win-win, on the opposite end of the high-end hospitality spectrum, it’s no frill, and requires a small number of employees. What else can I tell you: I am for!

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